PARIS - TotalEnergies (EPA:TTEF) (Paris:TTE) (LSE:TTE) (NYSE:TTE) has entered into an agreement to sell its entire stake in the West of Shetland assets in the United Kingdom to The Prax Group. The assets in question include the Laggan, Tormore, Glenlivet, Edradour, and Glendronach fields, along with the onshore Shetland Gas Plant and nearby exploration licenses.
The West of Shetland assets are currently producing approximately 7,500 barrels of oil equivalent per day, with gas accounting for about 90% of this production. The deal also encompasses the transfer of relevant TotalEnergies employees to Prax, adhering to applicable legislation.
Jean-Luc Guiziou, Senior Vice President Europe for Exploration & Production at TotalEnergies, remarked that this divestiture aligns with the company's strategy to optimize its portfolio by shedding mature non-core assets. Despite this sale, TotalEnergies reaffirms its commitment to the UK, where it maintains a substantial presence through its upstream portfolio in the North Sea (NYSE:SE) and its Integrated Power and Renewables portfolio.
In the UK, TotalEnergies has a significant footprint, having operated in the country for over 60 years and currently employing more than 1,800 people. As a prominent oil and gas operator, TotalEnergies manages about 30% of the UK Continental Shelf’s gas production. In 2023, the company's average daily production was 142,000 barrels of oil equivalent per day in its share.
TotalEnergies is also expanding its Integrated Power strategy in the UK, which includes renewable power production and flexible power generation capacities. Its renewable energy portfolio in the country consists of 1.1 GW of gross installed capacity and 4.5 GW under development. Additionally, in 2024, TotalEnergies enhanced its portfolio with the acquisition of gas-fired power plants with a combined output of 1.3 GW.
The company is a major supplier of gas and electricity to businesses and the public sector in the UK and provides EV charging solutions and petroleum products. TotalEnergies also has a stake in the carbon capture and storage (CCS) business through its 10% interest in the Northern Endurance Partnership.
The transaction is currently pending approval from the relevant authorities. This news is based on a press release statement from TotalEnergies.
In other recent news, TotalEnergies has been expanding its global presence with several significant acquisitions and partnerships. The energy giant has acquired a 60% stake in the offshore Block STP02 in Sao Tome and Principe, partnering with Angola's state oil company Sonangol and the national oil agency of Sao Tome and Principe. This move is expected to bolster TotalEnergies' presence in the Gulf of Guinea. Additionally, the company has finalized an agreement to purchase West Burton Energy from EIG for £450 million, enhancing its presence in the UK energy sector.
TotalEnergies has also reported robust financial results for Q1 2024, with a cash flow reaching $1.3 billion and a 16% growth in the adjusted net operating income for the integrated power segment to over $600 million. HSBC has raised its price target for TotalEnergies and maintained a Buy rating on the stock, justifying this by a 2% upgrade in the 2024-26 operating cash flow forecasts for TotalEnergies.
At the International Air Transport Association summit, TotalEnergies defended its efforts towards the development of Sustainable Aviation Fuels. Louise Tricoire, TotalEnergies' Senior Vice President, noted that the majority of the company's profits are reinvested in renewable energy research. Despite some climate dissent at the Annual General Meeting, TotalEnergies' CEO, Patrick Pouyanne, has retained his role.
In a bid to connect with American shareholders, the company is considering a potential U.S. listing.
InvestingPro Insights
TotalEnergies (NYSE:TTE) has been a consistent performer in the energy sector, and recent data from InvestingPro provides a snapshot of its financial health and market performance. With a market capitalization of $153.79 billion and a price-to-earnings (P/E) ratio of 7.35, TotalEnergies shows a compelling valuation, especially when considering its near-term earnings growth. This aligns with an InvestingPro Tip highlighting the company's low P/E ratio relative to its earnings growth potential.
The company's commitment to shareholder returns is evident, as TotalEnergies has maintained dividend payments for an impressive 48 consecutive years. The current dividend yield stands at 3.83%, reflecting the company's stable income-generating capability. Additionally, TotalEnergies' stock is known for its low price volatility, which might appeal to investors seeking stability in the often turbulent energy market.
InvestingPro data also reveals that TotalEnergies' revenue for the last twelve months as of Q1 2024 stands at $212.59 billion, with a gross profit margin of 34.87%. These figures underscore the company's robust operational efficiency and its ability to maintain profitability, as further supported by the InvestingPro Tip indicating that analysts predict the company will be profitable this year.
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